Online House Hunter: Regional variations

REGIONAL variations on any housing statistics seem to fluctuate so wildly that it’s a wonder why anyone would want to extract a national average.

But that’s often what the press demand and it can make for an enticing – if misguided – headline.

“Average price of a new home hits 31-month high” is the latest headline which can be good news or bad news depending on whether you’re buying, selling or building.

It comes from the New Homes Index compiled by SmartNewHomes which represents 85% of all new homes for sale in England, Wales and Scotland. The full report is available online.

According to the report, the average price of a new home is now £228,041 – that’s the highest figure since October 2008. It’s 3.8% up on last month and a 3.4% annual increase. The traditional ’spring bounce’ in buying activity, recent good weather and the continued low base rate are all credited with the strong demand for new homes.

However, the report is quick to point out that there are large regional variations in this headline figure.

Scotland was one per cent up on the month but 10.8% down on the year.

The North saw a 1.1% drop on the previous month although up 0.2% up on the year.

The struggling Welsh property market saw a monthly drop (-4.5%) and an annual one (-2.6%).

Even Greater London showed a 23.8% drop on last year’s figure although a 0.9% increase on the month.

The report shows East and West Midlands with the strongest price growth in May but suggests the regional picture will remain ‘volatile’ for a while to come.

Steve Lees, Director of SmartNewHomes said: “The significant rise in the average price of a new home is indicative of growing consumer demand during the peak buying season. There are significant numbers of potential buyers who are looking for new homes and who are keen to
buy while they can still find excellent value for money.

“The affordability of homes for first-time buyers remains a problem, though the industry is hopeful.”

And there’s a passing shot at the “continued turmoil in the planning system” which it says is preventing developers from respondingto market demand.

Hope is pinned on the FirstBuy scheme to be launched in the coming months.